Palestinian President Yasser Arafat says he is willing to meet Israeli Foreign Minister Shimon Peres to discuss efforts to end nearly 11 months of violence. Mr. Arafat said after a meeting with German Foreign Minister Joschka Fischer that he is willing to hold talks with Mr. Peres, possibly in Berlin.

The Palestinian leader, speaking in the West Bank town of Ramallah, said he appreciates what he called Mr. Fischer's "good ideas," and welcomes the suggestion to meet with the Israeli foreign minister.

Mr. Fischer said Germany is on call "seven days a week, 24 hours a day," to assist Israel and the Palestinians to discuss ways to end the current conflict. "We are very concerned about the recent developments, especially of innocent victims by terror," Mr. Fischer said. "We think that we should do all to bring forward the process to a positive development towards the reopening of talks, of negotiations to reduce violence and to the end of terror."

Mr. Fischer met later with Israeli Prime Minister Ariel Sharon. A spokesman for Mr. Sharon, Raanan Gissen, says the prime minister welcomes the idea of a Peres-Arafat meeting if it achieves results.

The spokesman says those results should include an end to "terror, incitement, and violence."

Foreign Minister Peres says he would like to meet with Mr. Arafat and discuss a ceasefire.

Israeli reports say Mr. Peres is proposing a gradual truce that is to begin in some areas of the Palestinian territories. In return for an end to the fighting, Israel would ease strict travel restrictions on the Palestinians.

As the diplomatic developments continued, a bomb exploded near a parked car in central Jerusalem setting the car on fire but causing no injuries. Police closed off the area and used a robot to check for additional explosives. Police say a second bomb was found inside the car.

The blast occurred in Jerusalem's Russian compound, which is several blocks away from the site of a suicide bombing earlier this month in a pizza restaurant that killed 16 people.